All Along the Watchtower

So, Monday was the first day of autumn. Which means that Sunday was the last day of summer. I’m sure that depresses a lot of people, but not me. Nope. Not me. Wanna know why? I am part owner of two mortgage companies, an insurance company, oh yeah, and half of the rest of the U.S. economy. I wonder when my dividend cheque will arrive?

In case you missed it, the government took over the world’s largest insurance company last week. Then they apparently decided that owning an insurance company is totally useless without some crap to insure, so they asked Congress for 700 billion dollars with which to purchase the bad debt of any financial institution willing to pawn their garbage off on the federal treasury. If one chooses to include the five trillion dollar mortgage liability the government assumed in taking over Fanny Mae and Freddy Mac two weeks ago, Treasury Secretary Henry Paulson has more than doubled the size of the national debt in only fifteen days. And it’s not over yet. No one knows exactly what these “toxic assets” the government intends to buy are worth. So, it’s quite possible that 700 billion just won’t cover it.

How did we get to this point? Well, that’s a long story, and my head hurts from the constant blathering I’ve been hearing all day long. But the Cliff notes version goes as follows: Some homeowners borrowed some money they probably should never have been allowed to borrow. Not content to rake in payments from people who couldn’t really afford them, banks packaged up these loans into securities and sold them multiple times to other financial institutions. The institutions then turned around and borrowed 30 times more money than they held in those mortgage assets, and lent that money to other people. When home prices started to fall, people decided to cash out their investments. But because the banks had borrowed exponentially more than the capital they had on hand, they couldn’t afford to cover their losses. Investors got wind that something was wrong and began withdrawing more of their money. Bank borrowed more money to cover increasing losses, and the rest is recent history.

But it didn’t have to end this way. Some – if not most of this – could have been prevented if only someone – preferably an adult – had been minding the store. But the geniuses on Wall Street playing roulette with everyone else’s money insisted they could host the party without a chaperone, and the chaperones, the United States government, allowed them to do just that, with horrendous results.

It should be obvious to everyone at this point that the unregulated free market is an unmitigated disaster. If you allow the market to do whatever it pleases, with boundless profit the only motive, the market will cannibalize itself, and then turn to the very public it violated for rescue when times go bad. Unfortunately, we’ve past the point where we can simply say to hell with them and let the entire system fail. Good people need work, good people need credit and good people need to know that at the end of the day their money is going to be worth the paper it’s printed on. The government has to rescue the system, and make up for its complete lack of oversight. Some undeserving financial institutions will continue to operate on the backs of the American taxpayer. But the penalty for destroying the public trust should and must be steep. There has to be some substantial disincentive for Wall Street to repeat this performance.

Treasury Secretary Paulson has come up with a plan to stop the bleeding on Wall Street he calls the Troubled Asset Relief Program – or TARP. That’s right, his solution to this crisis is to throw a tarp over it. Nice. I hope it work better than it sounds.

The stock market chaos seems to have returned the presidential polls to where they were before the election. Recent surveys now show Obama ahead of McCain by 4-5 points – with Obama crossing the 50% threshold in one CNN study. What can we learn from this? When this election is about lipstick, McCain leads. When it’s about issues, Obama leads.

In a related story, the Associated Press release a poll/study over the weekend detailing the role race might play in November. According to the AP, a significant portion of white Democrats hold negative opinions of blacks – enough to cause them to cast their vote against their own candidate. I’m stunned. I can’t express how surprised I am by this mind-blowing revelation. Right. I could have saved them six weeks of work and millions of dollars if they had only asked. Their numbers indicate that if racist white Democrats where to suddenly convert to non-racist white Democrats, Obama’s support among Democrats would increase between six and nine percentage points. It’s a sad commentary on America that there are so many people in this country willing to vote against their own self-interest just to avoid voting for the black guy.

Chevrolet released production images of its all-electric Volt last week after images of the car were leaked on the Internet. Unfortunately, the production car looks nothing like the concept General Motors has been masquerading as the Volt for the past two years. The production Volt is an angular four-door Dodge Stratus, instead of the two-door sport coupe advertised. According to people who keep track of such things, most comments to the company have been negative, including people who want to be taken off the waiting list for the car. Is there any doubt as to why the U.S. automakers are begging congress for money to stay afloat?

My NFL thoughts for Week 3:

The only difference between the 1995 Dallas Cowboys and the 2008 Dallas Cowboys is the cocaine.

The St. Louis Rams could improve the team by replacing their entire offensive line with actual rams. Sheep might actually block somebody.

Dolphins running back Ronnie Brown was responsible for all five Miami touchdowns in their win over New England Sunday. The once mighty Patriot defense was done in by trick plays from a high-school playbook. I thought Belichick was supposed to be a genius.

Seahawks quarterback Matt Hasselbeck made a statement Sunday afternoon. After Julius Jones escaped a pile of Rams defender and headed down the sideline toward the end zone, Hasselbeck ran ahead and launched himself head-first into the last two Rams defenders, knocking them flat on their backs and allowing Jones to waltz in for the score. Matt Hasselbeck is not just a quarterback; he’s a football player.

The states of Ohio and Missouri are a combined 0-12 so far this season. The ’76 Buccaneers might get to finally uncork the champagne this season.

My Superbowl picks for Week 3: Dallas Cowboys vs. Denver Broncos

In lighter news, the Large Hadron Collider will be shut down for several weeks due to an electrical failure and coolant leak that cause the machine to malfunction. Guess we’ll have to wait until next month for the black hole to destroy the earth.

Transformers vixen Megan Fox admitted to GQ Magazine that four years ago she fell in love with a female stripper. News that I’m sure makes a lot of people, very happy. According to Fox, “Nikita” performed beautiful slow dances to Aerosmith music (really?) and Fox would bring her gifts to inspire her to quit dancing. At this point the story gets a little strange. Fox claims she’s not a lesbian, but has the ability to be attracted to both sexes, and could see herself in a relationship with a girl. In fact, “Olivia Wilde is so sexy,” said Fox, “she makes me want to strangle a mountain ox with my bare hands.” Huh? What on earth does that even mean? And where do I get my ticket?

And finally, sorry ladies, but it’s official. Clay Aiken is gay. It’s true. People Magazine said so. Word is they will also announce that the earth is indeed round, and the sun will, most likely, come up tomorrow.